Introduction
If you’ve been using your credit card for years, you might be wondering if there are any benefits to it.
After all, it’s easy to feel like the essential part of your relationship with your credit card is paying off that balance in full every month.
Well, you’re right—it’s essential to pay off your balance in full each month. But here are ten reasons why it may be worth keeping that card around for a little longer:
You can earn rewards and travel faster.
Using your credit card to pay for purchases is the easiest way to earn rewards on your everyday spending.
Most credit cards offer bonus points or cash back when you make certain purchases with the card, and some even have benefits beyond rewards programs.
For example, some cards offer free travel insurance or complimentary concierge services that can help you plan your trip faster by booking restaurant reservations, arranging airport transportation, and more.
Finally, paying off your balance in full every month will ensure that you’re not paying interest charges on any purchases made with this card.
—and those interest charges would slow down how quickly you earn rewards or pay off your balance entirely.
It builds your credit history.
If you’re new to the world of credit cards, it can be intimidating to figure out how to use them responsibly.
The first thing to know is that your credit history is an essential factor in whether or not a lender will give you a loan and at what rate.
If you only have one or two cards with low limits, your score won’t be as high as someone who has five strong cards and pays off their balances on time each month.
A good strategy for building up your credit history is using one card regularly while keeping its balance low
—this way, if anything goes wrong with the card itself (e.g., fraud), there isn’t much damage done financially.
If this sounds like too much responsibility for you, try opening several small accounts instead of focusing all your attention on one large account;
-this gives lenders just enough data about how well you treat debt without overwhelming them with too much information at once.
With so many reasons why having multiple cards can help build better credit scores over time, it’s worth looking into getting some new ones soon!
It might help you stay organized and avoid late payments.
One of the most significant benefits of using your credit card is that it can help you avoid late payments.
-This is especially true if you set up automatic payments from your checking account or through another service like PayPal, which allows you to transfer money electronically from one account to another.
Setting up automatic payments will automatically deduct the amount on time each month, so there’s no need to worry about forgetting or missing a payment.
Suppose an online service automatically pays off your credit card bill each month. In that case, it will also help keep track of how much money you spend on things other than necessities such as food and shelter—a key component in building good financial habits.
It provides protection when you shop online.
When you shop online, your credit card company covers your purchase in case it’s lost or stolen.
-This is called “chargeback.” You don’t have to be right where the transaction took place.
You can file a chargeback claim from anywhere as long as you prove you’re not responsible for paying for the item in question.
The process differs depending on which card you use, but here are some general steps:
- Contact your credit card company and explain what happened. If possible, provide screenshots and other documentation of any suspicious activity on your account (this can help speed up their investigation).
- Receive confirmation that they’ve received all necessary information about your request for a chargeback;
- Wait for their decision; if approved, proceed with filing an official dispute form through PayPal (if applicable) or mailing in documentation proving innocence on shipping costs.
You can help meet minimum spending requirements on new cards.
If you’re looking to use your credit card to meet minimum spending requirements on a new card, you have a few options. You can apply for one if you don’t already have one.
If you don’t want to spend money on a credit card, check out our blog post about cash-back rewards cards that might be more up your alley.
You can make purchases under warranty.
If you purchase something under warranty, you may be eligible for protection. For example, if you buy a new laptop and it breaks down within the first year because of a manufacturer’s defect, your credit card will cover the cost of repairs as long as you make them within 90 days from when your item was purchased.
Credit card companies will also reimburse customers if their purchases are damaged or stolen during transit from the merchant to their home address if they haven’t used their credit card for anything else in that period.
Suppose prices on items have dropped since your purchase date (or the price has increased). In that case, many cards offer price protection policies that allow customers to get reimbursed for any difference between what they paid for an item and its current market value within 60 days after purchasing it.
You can earn a sign-up bonus after hitting the minimum spend.
One of the main reasons to use your credit card is to earn rewards, and if you manage to hit the minimum spending requirement, you might be entitled to a sign-up bonus. The type of reward varies from card to card—you could get cash back, miles, or points that can be redeemed for merchandise later on down the road.
You should also remember that all cards have different requirements for earning a sign-up bonus.
For example, Citibank’s Thank You Preferred Card offers 50,000 ThankYou points after spending $4K within three months of opening an account but doesn’t require an annual fee if you spend less than $37K per year on the card.
It can be cheaper to pay with credit than cash or a debit card.
Using a credit card can be cheaper than paying with cash or a debit card. Credit card interest rates are often lower than those on checking and savings accounts.
Plus, if you use your credit card to buy something and pay your bill in full each month, you won’t have to worry about any extra fees or penalties from carrying a balance (as long as you don’t exceed the limit).
Credit cards can also help save you money in other ways: some offer rewards that allow people to earn points for certain purchases, which can then be redeemed for gift cards or other perks like free flights and hotel stays.
You don’t carry cash, so you need to make it easy to pay for things.
You can use your credit card anywhere in the world that accepts Visa or Mastercard. You don’t need a local currency converter app or a stack of foreign bills to pay for something in Paris or London—just swipe your plastic.
And if you have an emergency and must leave town before paying off the balance from your trip, no worries:
-credit cards offer zero annual fees and interest rates as low as 12 percent on balance transfers (when you move balances from another account).
Pay for something new that you can’t afford to pay off in full at the end of the month.
You need to pay for something new that you can’t afford to pay off in full at the end of the month.
If you know that you’ll be purchasing something big and expensive, like a car or computer, it is not a good idea to use your credit card.
These are expenses that should be paid in cash. However, if there is an emergency where money is needed immediately, but you don’t have any on hand
—for example, if your car breaks down or your roof leaks—then using a credit card may be necessary.
Conclusion:
With the right credit card, you can earn rewards and travel faster, build your credit history, stay organized and avoid late payments, protect yourself when shopping online, help meet minimum spending requirements on new cards or earn sign-up bonuses after hitting the minimum spend.
It’s also cheaper to pay with a credit card than with cash or debit card because there are no transaction fees.
Finally, if you need to make a purchase that will take longer than one month to pay off in full, then using a credit card is probably better than paying cash or debit:
-because it will help keep track of all your expenses by keeping track of each payment due date for each purchase instead of just looking at one big payment amount each month, which doesn’t tell so much about how much money has been spent on what category.
